Intergenerational Transfers of Public Sector Jobs: A Shred of Evidence on Nepotism

Abstract

Public sector jobs are particularly attractive in Italy because of the wage rents they pay and other favorable working conditions (notably job security). Parents working in the public sector may try to use their positions, or the network of relationships formed at work, to favor their sons/daughters in gaining access to public sector jobs. We try to verify whether children of public employees effectively enjoy an advantage in terms of access to public employment. We estimate a model of the probability of working in the public sector controlling for individual characteristics and labor market conditions, showing that if the father works in the public sector the probability of his son/daughter’s working in the same sector is increased by a huge 44% (11 percentage points). The advantage is larger for low-ability individuals, “stayers” and Southern Italian residents. Subsequently, we estimate a model of the probability of an individual’s ending up in the same occupation as his/her father: we find that the probability of following in a father’s occupational footsteps is higher for public employees’ children than is the case of the children of entrepreneurs, professionals and self-employed workers. We interpret these findings as evidence of nepotism in public employment in Italy.

Keywords: public sector labor markets; favoritism; nepotism; intergenerational persistence of occupation

JEL Classification: M51, J45, J62, D73, J71, Z13